Sirius XM Holdings, the Communication Services sector company, was revisited by a Wall Street analyst today. Analyst Jessica Reif Ehrlich from Bank of America Securities maintained a Sell rating on the stock and has a $20.00 price target.
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Jessica Reif Ehrlich’s rating is based on a combination of factors that suggest challenges for Sirius XM Holdings. Despite reporting better-than-expected second-quarter results, the company did not revise its revenue, EBITDA, or free cash flow guidance for 2025, which indicates a cautious outlook. Additionally, Sirius XM is facing difficulties in growing its subscriber base, particularly with streaming-only subscribers, which is expected to result in a reduction of 300,000 net adds this year.
Moreover, the company is encountering obstacles in increasing advertising revenue, especially at Pandora, where a lower-than-expected revenue per thousand (RPM) result has led to a downward revision of advertising revenue forecasts. These factors, coupled with a reduced price objective to $20 due to lower free cash flow estimates, underpin the Sell rating. The company’s efforts to stimulate subscriber growth and improve advertising traction remain critical challenges that contribute to the underperform rating.
In another report released on July 16, Morgan Stanley also maintained a Sell rating on the stock with a $22.00 price target.